3D-printed house in 24 hours: that's the pace of proptech innovation

3 December 2018

Despite the rain, REINSW's Future of Protech lunch last week attracted 60 real estate agents, representatives of proptech startups, venture capitalists and industry investors.

Airport closures prevented keynote speaker Chris Rolls (CEO of PieLab Venture Partners) from attending, but what would a tech-based event be if someone didn't present via video conference?

The key issue of the event was to look at ways to embrace innovations supporting the property services industry, and it was incredible to hear how technology and property can, and are, working together to improve customer experience.

Rolls, who heads up Australia's only residential proptech VC fund, made it clear that increased funding available to proptech startups globally meant innovation would only accelerate.

“Funding has grown from $221 million in 2012 up to $7.65 billion in 2017 and it’s grown even more since then,” he said.

Avi Naidu of real estate investment fund, Taronga Group, agreed: "Real estate technology has expanded rapidly. Growth in Australia and the entire region is unprecedented.

But Naidu also made it clear that proptech startups and innovation isn't only about capital.

"It's about asking how the innovation will impact our investors and the industry, who are ultimately our customers," he said.

Future-proofing an industry

Justin Butterworth from Snug said technology is not here to disrupt the industry, but to add value to the customer experience. And we all need to get on board.

"Consumers are operating at lightspeed," he said. "Technology is enabling them and service providers are trying to keep up. Government is just getting in the way.

“Around Australia there is more than $4 billion tied up in rental bonds, with $1.3 billion in NSW alone, but renters receive just the minimum interest from that while governments earn millions.

"If you can create a system that allows landlords to have security that their property will be protected while also putting more money into the pockets of renters, that’s a better experience for everyone.”

It's ideas and innovation like this that prove proptech – and the innovative startups developed from and with it – will positively impact the property services industry.

Consumers are operating at lightspeed. Technology is enabling them and service providers are trying to keep up.
– Justin Butterworth, Snug

"Proptech is not working against real estate agents or taking market share away," added Quirin Schwaigenhofer of MadeComfy, a short-term rental management service for property owners and investors.

Schwaigenhofer evidenced this by giving examples of agencies, such as Belle Property, who have partnered with MadeComfy to expand their offering to clients.

“There is a lot of work involved [in property management] that most property managers cannot do on top of their duties to long-term rentals," he said. "We are able to partner with agencies to offer short-term rental options for their landlords and that is a great experience for the customer."

“There is a whole lot of innovation happening out there that we need to bring into the tent and not be frightened of.
The first step to that is building a community of innovators and agents, and REINSW is excited to support more initiatives that bring everyone closer together.”
– Tim McKibbin, REINSW CEO

Getting on board

Alister Maple-Brown from event sponsors, Rockend, asked the audience to consider how they can be part of the education process.

"There is a dynamism across our marketplace," he said. "Yes, there are disintermediators, like AirBNB. But businesses such as MadeComfy prove there is value in the middleman.

"In leveraging technology, third-party providers can offer single services to agents. This then allows agents to provide an improved quality of service to their clients."

In the spirit of innovation, Andrew Haigh from REA Group (who owns realestate.com.au) said they have worked with many startups in the property industry and incorporated them into their business, for example flatmates.com.au and Hometrack.

"They are separate units within the business that allow us to deepen and improve our offering," he said. "Real estate is the largest contributor to our economy, so we have a responsibility to keep growing it."

Innovation can't be stopped

Rolls identified over 260 proptech companies in Australia. And with literally billions of dollars of funding available, this industry will continue to experience exponential growth.

A key take away for panel host, Kylie Davis, was the "next stage" of real estate technology identified by Rolls, saying while many in the industry – especially in Australia – focus on the disruptive competitors, such as PurpleBricks, the next stage of real estate technology will be a synthesis stage based on big data, sensors and transaction management platforms that make life easier for both agents and real estate consumers.

And this, the panel agreed, makes it even more critical that startups and the property services industry see each other as allies, not competitors.